The prospects for recovery in the US housing market became doubtful again on Wednesday. From Bloomberg:
Sales of new homes in the U.S. unexpectedly fell in January to the lowest level on record, a sign that an extension of a government tax credit may not be enough to rekindle demand.
Purchases declined 11 percent to an annual pace of 309,000, below the lowest forecast in a Bloomberg News survey of economists, figures from the Commerce Department showed today in Washington. The median sales price dropped 2.4 percent from January 2009 and the supply of unsold homes increased.
The report underscores Federal Reserve Chairman Ben S. Bernanke’s comments today that the economy is in a “nascent” recovery still in need of low interest rates. Homebuilders face competition from foreclosed properties that have driven down prices at the same time companies are reluctant to create jobs.
In contrast, industrial orders in the euro area provided a positive surprise. Bloomberg reports:
European industrial orders unexpectedly rose for a second month in December led by a surge in demand for capital goods such as machinery and equipment.
Orders to industrial companies in the 16-nation euro area rose 0.8 percent from November, when they gained 2.7 percent, the European Union’s statistics office in Luxembourg said today. Economists forecast a drop of 1 percent, according to the median of 18 estimates in a Bloomberg News survey. From the year-earlier month, industrial orders increased 9.5 percent, the first annual gain since July 2008.
And in Japan, export growth accelerated in January. Bloomberg reports:
Japan’s exports climbed at the fastest pace in almost 30 years in January, supporting the nation’s economic recovery as falling wages damp demand at home.
Shipments abroad advanced 40.9 percent from a year earlier, the biggest increase since February 1980, the Finance Ministry said today in Tokyo. The median estimate of 22 economists surveyed by Bloomberg was for exports to rise 39.5 percent...
Imports rose 8.6 percent, the first increase since October 2008, today’s report showed. That was less than the median estimate for a 12.1 percent gain.